Mackenzie Phillips Doing 'Great' in Rehab

One month after being arrested and charged with heroin and cocaine possession, Mackenzie Phillips is "doing great," her sister says.

"She's in recovery now, and we're so proud of her," Bijou Phillips told PEOPLE Wednesday night at the Manhattan premiere party of her new film, Choke at The Box in Manhattan. "This whole thing is the best thing that's ever happened for her. We’re so happy."

Mackenzie, 48, has long struggled with drug addiction and has checked into rehab several times. But Bijou, 28, who plays a milkmaid in the raunchy comedy (which costars Sam Rockwell and Anjelica Huston), is hopeful about Mackenzie's progress.

"I'm thankful that this happened and that we were able to do this," Bijou said. "It’s like we have our sister back." – Chris Willard